The credit rating of Evrofinance Mosnarbank (hereinafter, Evrofinance Mosnarbank or the Bank) reflects the satisfactory assessment of the business profile, strong capital adequacy position, adequate funding and liquidity position, and the low risk profile assessment. The rating takes into account the level of support from the parent company (hereinafter, the parent company, Supporting Entity, SE, or the Group), which is assessed as medium and is reflected in the addition of three notches to the Bank’s standalone creditworthiness assessment (SCA).
Evrofinance Mosnarbank is a medium-sized credit institution headquartered in Moscow. The Bank is focused on working primarily with corporate clients. An integral part of the Bank’s business is the implementation of foreign trade operations, including in Venezuela.
key assessment factors
The satisfactory business profile assessment (bbb-) reflects the consistent, in ACRA’s opinion, development of the Bank in line with its strategy, as well as the role it plays within the Group: in particular, Evrofinance Mosnarbank takes an active part in the development of the parent entity’s international projects, including settlement operations. As part of the strategy, the main focus is on developing payment services, cash and settlement services, etc. At the same time, the volume of credit operations carried out by the Bank is limited. Currently Evrofinance Mosnarbank is one of the five credit institutions included by the Bank of Russia into the register of data systems operators authorized to issue digital financial assets (DFA). ACRA assumes that the Bank’s role within the Group will be maintained and its positions in the banking market will strengthen to some extent.
According to the Agency’s estimates, in H1 2024, Evrofinance Mosnarbank was one of the 90 largest Russian banks by equity and did not play a noticeable role in the domestic banking services market in the Russian Federation, which is reflected in the corresponding adjustment made following a secondary assessment of the business profile. Amid an overall satisfactory level of diversification, the main volume of operating income is formed by interest income from corporate loans and the securities portfolio (about 70% in 2024).
The Agency views the quality of the Bank’s corporate governance as satisfactory and appropriate in terms of the Bank’s goals. The ownership structure is generally assessed as transparent.
Strong capital adequacy assessment. The Bank consistently maintains high regulatory capital adequacy ratios. As of May 1, 2025, the N1.2 ratio was 20.82%. A significant buffer for the absorption of unexpected losses allows the Bank to withstand an increase in the cost of risk in excess of 500 bps and comply with capital adequacy standards. At the same time, the Bank’s ability to generate capital remains stable. Operational efficiency is assessed as medium, while the profitability of the Bank’s operations is similar to that of peer banks.
ACRA assesses the credit quality of the Bank’s assets as satisfactory. In ACRA’s opinion, although the loan portfolio mainly includes receivables of a rather high credit quality, its relatively high concentration is a negative factor. When analyzing the loan portfolio, ACRA notes the rather high share of unsecured loans and guaranteed loans. The largest share of assets is formed by receivables from financial institutions and a portfolio of securities whose credit quality, in ACRA’s view, is fairly high. The Agency notes the Bank’s considerable exposure to market risk. The presence on the balance sheet of a significant amount of investments in investment property was also taken into account when assessing the risk profile. In view of the above factors, ACRA assesses the risk profile as low. At the same time, the quality of the risk management system corresponds to the scale and areas of the Bank’s development and, in the Agency’s opinion, is satisfactory.
The adequate funding and liquidity position stems from the high volume of liquid assets on the Bank’s balance sheet. Evrofinance Mosnarbank is able to withstand an outflow of client funds in both ACRA’s base case and stress scenarios. The long-term liquidity shortage indicator as of Q1 2025 was assessed as strong, which indicates a balance between the Bank’s assets and liabilities. As of May 1, 2025, the N2, N3, and N4 ratios amounted to 77.35%, 138%, and 20.56%, respectively. The Agency notes that the share of liabilities formed by the 10 largest creditors (depositors) is still high, however, the share of funds raised from financial organizations is declining.
The rating takes into account the medium level of support from the parent company. In ACRA’s opinion, the high creditworthiness of the SE and absence of any barriers to providing support mean that the Bank can count on receiving support when necessary.
The Agency notes that the relatively small scale of business and the limited degree of the Bank’s integration into the Group’s business processes (low volume of loans provided to companies of the parent structure, as well as liabilities attracted from the Group) reduce the strategic risk that a hypothetical default of the Bank may pose for the development of the SE. At the same time, the Supporting Entity delegates to the Bank a number of functions (including participation in the development of international projects, development and implementation of DFA-based assets), which may allow it to increase its strategic importance. The SE exercises a relatively high level of shareholder and operational control over the Bank’s activities. At the same time, the Bank and the Supporting Entity operate under different brands.
The parent company has not needed to provide capital or liquidity support to the Bank in the past, however, the SE has announced that it is ready to offer such support. In view of the above, three notches have been added to the Bank’s SCA.
KEY ASSUMPTIONS
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Maintaining the current business model over the next 12–18 months;
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Maintaining capitalization and profitability metrics at their current levels.
POTENTIAL OUTLOOK OR RATING CHANGE FACTORS
The Stable outlook assumes that the rating will highly likely stay unchanged within the 12 to 18-month horizon.
A positive rating action may be prompted by:
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Significant decline in the loan portfolio coupled with its sustainably high quality;
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Lower volume of accepted market risk;
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Lower volume of investment property on the balance sheet;
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Significant increase in the importance of the Bank for the development of the parent company.
A negative rating action may be prompted by:
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Lower diversification of operating income;
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N1.2 capital adequacy ratio falling below 12%;
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Growth of concentration of the resource base;
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Lower importance of the Bank in terms of development of the parent company.
RATING COMPONENTS
SCA: bbb-.
Individual adjustments: none.
Support: SCA plus three notches.
ISSUE RATINGS
No outstanding issues have been rated.
REGULATORY DISCLOSURE
The credit rating has been assigned to Evrofinance Mosnarbank under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Banks and Bank Groups under the National Scale for the Russian Federation, Methodology for Assigning Credit Ratings with External Support, and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.
The credit rating of Evrofinance Mosnarbank was published by ACRA for the first time on July 18, 2023. The credit rating and its outlook are expected to be revised within one year following the publication date of this press release.
The credit rating was assigned based on data provided by Evrofinance Mosnarbank, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the IFRS financial statements of Evrofinance Mosnarbank and the financial statements of Evrofinance Mosnarbank drawn up in compliance with the requirements of the Bank of Russia. The credit rating is solicited and Evrofinance Mosnarbank participated in its assignment.
In assigning the credit rating, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.
ACRA provided additional services to Evrofinance Mosnarbank. No conflicts of interest were discovered in the course of credit rating assignment.
